Motion Systems Corp. v. Bush

Slip Op. 04-58

UNITED STATES COURT OF INTERNATIONAL TRADE

____________________________________
:
MOTION SYSTEMS CORPORATION, :
:
Plaintiff, :
:
v. : Court No. 03-00146
:
GEORGE W. BUSH, President of the :
United States, and : Before: Timothy C. Stanceu,
: Judge
ROBERT B. ZOELLICK, United States :
Trade Representative, :
:
Defendants, and :
:
CCL INDUSTRIAL MOTOR LTD., :
:
Defendant-Intervenor. :
____________________________________:

[Summary judgment granted for defendants]

Decided: June 3, 2004

Fitch, King & Caffentzis (Richard Carville King, James Caffentzis) for plaintiff.

Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Jeanne E. Davidson,
Deputy Director, Steven C. Tosini, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice; David L. Weller, Assistant General Counsel, Office of the
United States Trade Representative, of counsel, for defendants.

Kaye Scholer LLP (Michael P. House and Margaret S. Rudin) for defendant-intervenor.
Court No. 03-00146 Page 2

OPINION

STANCEU, Judge:

Plaintiff Motion Systems Corporation challenges a decision by the President of the

United States to deny import relief to the U.S. industry manufacturing “pedestal actuators,”

which are components of electrically-powered vehicles used by persons whose mobility is

impaired. Plaintiff’s principal argument is that the President exceeded his statutory authority in

declining to impose import quotas on pedestal actuators from the People’s Republic of China

(“China”) following a recommendation by the United States International Trade Commission that

import quotas are needed to remedy “market disruption” adversely affecting the U.S. pedestal

actuator industry. Plaintiff contends in particular that the President acted contrary to the relevant

statute in denying relief without quantifying the adverse impact of providing relief and

demonstrating that this adverse impact was “clearly greater” than the benefits that such relief

would provide to the domestic industry.

Motion Systems has named as defendants the President and the United States Trade

Representative, who issued a recommendation to the President addressing the issue of import

relief after publishing a notice soliciting comment and conducting a public hearing. In addition

to its primary argument, plaintiff raises objections to the U.S. Trade Representative’s conduct of

the public hearing, to the President’s considering certain political factors that Motion Systems

considers improper, and to the apparent denial of Motion Systems’ request to the U.S. Trade

Representative that the President reconsider the final decision.
Court No. 03-00146 Page 3

This matter is before the court on two motions by defendants. Defendants moved to

dismiss for lack of subject matter jurisdiction pursuant to USCIT Rule 12(b)(1) and, previous to

that motion, sought dismissal of this action through judgment upon an agency record pursuant to

USCIT Rule 56.1.

This court concludes that it has subject matter jurisdiction of this case under 28 U.S.C.

§ 1581(i). This court further concludes that the President’s decision declining to impose

restraints on imports of pedestal actuators must be upheld because it is within the authority

delegated to the President by the relevant statute. The court finds no basis to conclude that the

presidential decision misconstrued statutory provisions or must be overturned for noncompliance

with procedural requirements. Additionally, the court finds no basis to order a reopening of

proceedings for reconsideration of the final presidential decision. Accordingly, for the reasons

discussed below, defendants are entitled to judgment as a matter of law.

I. BACKGROUND

The pedestal actuators imported from China, and the pedestal actuators manufactured in

the United States by Motion Systems Corporation, are motor-driven mechanical devices chiefly

used as components in mobility scooters and electric wheelchairs. As typically installed in a

mobility scooter or electric wheelchair, a pedestal actuator converts rotary motion, created by the

electric motor, to the linear motion required to raise and lower the seat.

Motion Systems Corporation sought import relief through the administrative proceedings

summarized below. Electric Mobility Corporation, a manufacturer of mobility scooters and

purchaser of Chinese-origin pedestal actuators, opposed the imposition of import relief in those
Court No. 03-00146 Page 4

administrative proceedings, as did defendant-intervenor CCL Industrial Motor Ltd., a Chinese

manufacturer of pedestal actuators.

A. Procedures Leading to the President’s Decision to Deny Relief

Motion Systems, on August 19, 2002, petitioned the U.S. International Trade

Commission (the “USITC”) for relief from imports of pedestal actuators from China, under

procedures established by section 421 of the Trade Act of 1974, as amended (19 U.S.C. § 2451)

(“Section 421”). Section 421, added to the Trade Act of 1974 by the U.S.-China Relations Act of

2000, establishes procedures under which the President, following an affirmative “market

disruption” determination by the USITC, is empowered to proclaim “increased duties or other

import restrictions” on a product of China that “is being imported into the United States in such

increased quantities or under such conditions as to cause or threaten to cause market disruption to

the domestic producers of a like or directly competitive product.” 19 U.S.C. § 2451(a). “Market

disruption” is found to exist “whenever imports of an article like or directly competitive with an

article produced by a domestic industry are increasing rapidly, either absolutely or relatively, so

as to be a significant cause of material injury, or threat of material injury, to the domestic

industry.” 19 U.S.C. § 2451(c).

The Section 421 procedures involve separate determinations by the USITC and

potentially by the President, who is to make the actual decision whether or not to grant import

relief after receiving a recommendation of the U.S. Trade Representative. To initiate the process,

a domestic producer may petition the USITC to investigate whether a product of China is being

imported into the United States in such increased quantities or under such conditions as to cause
Court No. 03-00146 Page 5

or threaten to cause market disruption to domestic producers of like or directly competitive

products. 19 U.S.C. § 2451(b).

The statute directs the USITC, upon making an affirmative determination of market

disruption, to propose actions in the form of increased duties or other import restrictions

necessary to prevent or remedy the market disruption. 19 U.S.C. § 2451(f). The statute further

directs the U.S. Trade Representative, after receiving the report of the USITC, to publish in the

Federal Register notice of any import relief measure the U.S. Trade Representative proposes to

be taken and to invite public comment, with the opportunity to request a public hearing on the

appropriateness of the proposed measure. 19 U.S.C. § 2451(h)(1). Further, the statute authorizes

the U.S. Trade Representative to enter into agreements with the People’s Republic of China

under which China would take action to prevent or remedy market disruption and provides that

the Trade Representative “should seek to conclude such agreements” within a 60-day period

commencing five days after receiving an affirmative determination of the USITC. 19 U.S.C.

§ 2451(j)(1).

Section 421 vests in the President the discretion whether to provide import relief. Within

15 days of receiving the Trade Representative’s final recommendation, the President is directed

to provide import relief for the domestic industry “unless the President determines that provision

of such relief is not in the national economic interest of the United States” or, in extraordinary

cases, that it would cause serious harm to the national security. 19 U.S.C. § 2451(k)(1). The

import relief may take the form of increased duties or other import restrictions and is to remain in

effect “for such period as the President considers necessary to prevent or remedy the market

disruption.” 19 U.S.C. § 2451(a).
Court No. 03-00146 Page 6

The President’s discretion to deny import relief following an affirmative USITC finding

of market disruption is subject to specific limitations. The statute provides that “[t]he President

may determine . . . that providing import relief is not in the national economic interest of the

United States only if the President finds that the taking of such action would have an adverse

impact on the United States economy clearly greater than the benefits of such action.” 19 U.S.C.

§ 2451(k)(2).

In the proceedings leading up to this litigation, the USITC issued its report on the petition

of Motion Systems on November 7, 2002, following the submission of briefs and a public

hearing. See Pedestal Actuators from China: Investigation No. TA–421–1, USITC Pub. 3557.

The USITC concluded in its report that pedestal actuators from China are being imported in such

increased quantities or under such conditions as to cause market disruption to the domestic

producers of like or directly competitive products. The USITC proposed, as a remedy to the

market disruption it had found to exist, a three-year period of quantitative restrictions on Chinese

pedestal actuator imports, to consist of 5,626 units in the first year, 6,470 units in the second

year, and 7,440 units in the third year.1 See International Trade Commission: Pedestal

Actuators, 67 Fed. Reg. 69,557, 69,558 (Nov. 18, 2002).

After seeking, unsuccessfully, an agreement with the People’s Republic of China to

prevent or remedy market disruption from pedestal actuator imports, and after inviting written

1
These quantitative limits were proposed by Vice Chairman Hillman and Commissioner
Miller. As authorized by 19 U.S.C. § 2451(g)(2)(C), Commissioner Koplan separately proposed
a three-year period of quantitative restrictions consisting of 4,425, 4,514, and 4,604 units per
year, respectively. Chairman Okun and Commissioner Bragg made negative determinations
concerning market disruption.
Court No. 03-00146 Page 7

comments2 and conducting a public hearing, the U.S. Trade Representative submitted its

recommendation to the President on January 2, 2003.3 On January 17, 2003, the President issued

a determination not to impose restrictive measures on imports of pedestal actuators from China.

B. The President’s Decision to Deny Relief to the Domestic Pedestal Actuator Industry

The President’s decision was released in the form of a Federal Register notice setting

forth a memorandum to the U.S. Trade Representative (“USTR” or “Trade Representative”).4

The decision included the following findings: (1) providing import relief for the U.S. pedestal

actuator industry is not in the national economic interest; and (2) import relief would have an

adverse impact on the United States economy clearly greater than the benefits of such action.

The presidential decision went on to state four reasons for the decision, as follows:

(1) the facts indicate that the USITC’s recommended quota would not likely benefit the domestic

industry and instead would cause imports to shift to other offshore sources; (2) even if the quota

were to benefit the primary domestic producer (i.e., Motion Systems), the cost of the quota to

consumers, downstream purchasers of pedestal actuators, and users of the downstream products

would substantially outweigh any benefit to producers’ income; (3) the cost of the quota would

increase pressure on domestic producers of the downstream products (i.e., mobility scooters and

electric wheelchairs) to move offshore, causing more economic harm than good due to the larger

2
Office of the U.S. Trade Representative, Notice of Proposed Measure and Opportunity
for Public Comment Pursuant to Section 421 of the Trade Act of 1974: Pedestal Actuators from
the People’s Republic of China, 67 Fed. Reg. 71,007 (Nov. 27, 2002) (“USTR Notice”).
3
The U.S. Trade Representative did not make public, and was not required by
Section 421 to make public, its recommendation to the President.
4
The President, Presidential Determination on Pedestal Actuator Imports from the
People’s Republic of China, 68 Fed. Reg. 3,157 (Jan. 22, 2003).
Court No. 03-00146 Page 8

number of workers in the downstream industry; and (4) the quota would negatively affect the

many elderly and disabled purchasers of the downstream products. The portion of the

presidential decision setting forth the two findings and the four aforementioned reasons reads as

follows.

After considering all relevant aspects of the investigation, I have
determined that providing import relief for the U.S. pedestal
actuator industry is not in the national economic interest of the
United States. In particular, I find that the import relief would
have an adverse impact on the United States economy clearly
greater than the benefits of such action.

In determining not to provide import relief, I considered its overall
costs to the U.S. economy. The facts of this case indicate that
imposing the USITC’s recommended quota would not likely
benefit the domestic producing industry and instead would cause
imports to shift from China to other offshore sources.

Even if the quota were to benefit the primary domestic producer,
the cost of the quota to consumers, both the downstream
purchasing industry and users of the downstream products, would
substantially outweigh any benefit to producers’ income. The
USITC’s analysis confirms this conclusion.

In addition, downstream industries are already under pressure to
migrate production offshore to compete with lower-cost imports of
finished products. Higher component costs resulting from import
relief would add to this pressure. Given the significantly larger
number of workers in the downstream purchasing industry when
compared with the domestic pedestal actuator industry, I find that
imposing import restrictions would do more economic harm than
good.

Finally, a quota would negatively affect the many disabled and
elderly purchasers of mobility scooters and electric wheelchairs,
the primary ultimate consumers of pedestal actuators.
Court No. 03-00146 Page 9

C. Motion Systems’ Request for Reconsideration of the President’s Decision

Following issuance of the President’s decision to deny import relief on Chinese-origin

pedestal actuators, Motion Systems filed with the U.S. Trade Representative a submission, dated

February 12, 2003, requesting “reconsideration” of that decision and citing “new evidence which

has come to light since January 17, the date of the President’s determination.” The “new

evidence” consisted of documents that Motion Systems presented in support of claims that

Electric Mobility did not reduce the prices of mobility scooters it sold to the Department of

Veterans Affairs and did not make an electrically-powered seat lift (which incorporates a pedestal

actuator) standard equipment on 70 percent of its models. Motion Systems contended that this

“new evidence” contradicted statements made by the president of Electric Mobility Corporation

(“EMC”), Michael Flowers, before the USTR hearing and raised credibility concerns. The post-

decision submission stated as follows:

If EMC did not, in fact, include the seat lift as standard equipment
on 70 percent of its scooters, then that calls into serious question
Mr. Flowers’ claim that EMC reduced the prices for those scooters
as a result of switching to the lower-priced Chinese unit,
particularly since Mr. Flowers acknowledged that EMC did not
reduce the price of the seat lift as an option. And if it is the case
that EMC did not, in fact, reduce the prices when it switched to the
Chinese unit, then it calls into question the credibility of
Mr. Flowers’ claim that EMC would be forced to increase its prices
$200 if relief were granted. Once Mr. Flowers’ testimony is put
aside, there is no evidence to indicate the extent to which the costs
of relief would outweigh the benefits.

Stewart and Stewart letter to USTR, February 12, 2003 at 16-17, in Pl.’s Ex. 2.

In a letter to counsel for plaintiff dated March 7, 2003, the Assistant U.S. Trade

Representative for North Asian Affairs, in an apparent reference to the February 12, 2003
Court No. 03-00146 Page 10

submission, acknowledged with appreciation the “supplemental information you have provided”

but did not indicate that the President would reconsider the decision to deny import relief. The

March 7, 2003 letter stated, inter alia, that “[y]our letter points to evidence that, in your view,

shows the sole U.S. purchaser of Chinese pedestal actuators, Electric Mobility, did not reduce

prices for its mobility scooters and electric wheelchairs after it began sourcing pedestal actuators

from China and thus did not pass along to consumers any cost savings.” That letter went on to

state that the issue whether Electric Mobility reduced its prices after purchasing Chinese pedestal

actuators was clearly reflected “as disputed between the parties” in the materials before the

President at the time of the President’s decision, adding that “this issue relates only indirectly to

the considerations identified by the President as dispositive in his decision.” This action

followed.

II. DISCUSSION

A. Subject Matter Jurisdiction

The court concludes that it is granted jurisdiction over the instant action by 28 U.S.C.

§ 1581(i). Under paragraphs (2)-(4) of subsection (i) of § 1581, this Court has exclusive

jurisdiction of civil actions commenced against the United States, its agencies, or its officers that

arise out of any law of the United States providing for “tariffs, duties, fees, or other taxes on the

importation of merchandise for reasons other than the raising of revenue” [paragraph (2)],

“embargoes or other quantitative restrictions on the importation of merchandise for reasons other

than the protection of the public health or safety” [paragraph (3)], or “administration and

enforcement with respect to the matters referred to in paragraphs (1)-(3) of this subsection . . . .”

[Paragraph (4)].
Court No. 03-00146 Page 11

Section 421 provides for increased tariffs for reasons other than raising revenue,

specifically, for preventing or remedying market disruption adversely affecting a domestic

industry. It also authorizes quantitative import restrictions to serve these same purposes, which

are reasons “other than the protection of the public health or safety.” Plaintiff has commenced an

action against the President of the United States and the U.S. Trade Representative, both of

whom are officers of the United States. With respect to the President, status as an officer of the

United States stems from the Constitution itself, for the President is the essential constitutional

officer under Article II of the Constitution. “The executive Power shall be vested in a President

of the United States of America. He shall hold his Office during the Term of four Years . . . .”

U.S. CONST ., Art. II, § 1. “This grant of authority establishes the President as the chief

constitutional officer of the Executive Branch, entrusted with supervisory and policy

responsibilities of utmost discretion and sensitivity.” Nixon v. Fitzgerald, 457 U.S. 731, 750

(1982). The court concludes, therefore, that this action falls squarely within the express terms of

the jurisdictional provisions in § 1581(i)(2) and (i)(3).

Defendants move to dismiss this action for lack of subject matter jurisdiction, advancing

an argument based on two contentions. Defendants contend, first, that the President must be

dismissed from this action, relying on the recent decision of the United States Court of Appeals

for the Federal Circuit in Corus Group PLC v. Int’l Trade Comm’n. 352 F.3d 1351 (Fed. Cir.

2003). Specifically, defendants interpret Corus Group to require that a challenge such as this to

a presidential decision be dismissed for lack of subject matter jurisdiction because of the Federal

Circuit’s statement in Corus Group that “section 1581(i) does not authorize proceedings directly

against the President.” Id., 352 F.3d at 1359. The second contention by defendants is that this
Court No. 03-00146 Page 12

case may not proceed as a challenge to an action of the U.S. Trade Representative, who in the

statutory Section 421 procedure performs the role of advising the President regarding import

relief. Defendants argue that this Court, lacking “jurisdiction to entertain plaintiff’s claims

against the President, likewise lacks jurisdiction to entertain challenges to the President’s

advisors.” Defs.’ Mot. to Dismiss at 3. According to their argument, the U.S. Trade

Representative’s recommendation to the President addressing the issue of import relief is purely

advisory, rather than determinative of legal rights, and hence it is unreviewable under principles

announced by the Supreme Court in Bennett v. Spear, 520 U.S. 154, 177-78 (1997), and cited by

the Federal Circuit in Corus Group. Having contended that this action may be brought neither

against the President nor against the U.S. Trade Representative, defendants conclude that this

court must dismiss this case for lack of subject matter jurisdiction.

The court disagrees with defendants’ jurisdictional analysis for two reasons. First, if this

court were to construe the Federal Circuit’s decision in Corus Group to require dismissal of this

action, it would be acting contrary to the jurisdictional principles applied by the Federal Circuit

in a line of cases in which presidential action was challenged directly, including Humane Society

of the United States v. Clinton, 236 F.3d 1320 (Fed. Cir. 2001), a decision not overturned by

Corus Group. See Corus Group, 352 F.3d at 1359-1360. Second, were the court to accept

defendants’ reasoning, it would be holding, in the particular posture of this case, that decisions

by the President to deny import relief pursuant to authority delegated by Congress in Section 421

are entirely outside the scope of judicial review under 28 U.S.C § 1581(i). Such a holding, which

would go beyond the holding in Corus Group, cannot be reconciled with the express language of

§ 1581(i). These two points are discussed below.
Court No. 03-00146 Page 13

In Corus Group, the Court of Appeals for the Federal Circuit concluded that the Court of

International Trade should have dismissed the President from an action brought under 28 U.S.C.

§ 1581(i) challenging certain decisions made during an “escape clause” proceeding affecting

steel imports that was conducted under section 201 of the Trade Act of 1974. The Court of

Appeals reasoned that § 1581(i) does not authorize proceedings directly against the President,

observing that it “refers only to actions ‘against the United States, its agencies, or its officers’ and

does not specifically include the President.” 352 F.3d at 1359. The Court of Appeals in Corus

Group held that the Court of International Trade nevertheless had jurisdiction over the subject

matter of the dispute under 28 U.S.C. § 1581(i) and concluded that relief still could have been

sought against the Commissioner of Customs, who along with the President and the U.S.

International Trade Commission was named as a defendant. The Court of Appeals observed that

had plaintiffs prevailed, the Customs Commissioner could have been enjoined from collecting

duties, as proclaimed by the President under the escape clause, on the imported tin mill steel

products that were at issue in the case. Id.

In Humane Society of the United States v. Clinton, as in Corus Group, plaintiffs sought

relief against, and named as defendants, the President of the United States and other government

officials (in that case, the Secretaries of State and Commerce). The plaintiffs in Humane Society

sued the government officials for their alleged failure to comply with the Driftnet Fishing Act,

16 U.S.C. §§ 1826-1826g. See Humane Society, 236 F.3d at 1323. Specifically, plaintiffs

appealed from a decision of this Court refusing to issue a writ of mandamus ordering the

President to impose sanctions on Italy for large-scale driftnet fishing and refusing to find

arbitrary and capricious a certification by the Secretary of Commerce that large-scale driftnet
Court No. 03-00146 Page 14

fishing during a specified time period had been terminated by Italy. See id. Plaintiffs had

brought their case in this Court under 28 U.S.C. § 1581(i).

The defendants in Humane Society sought dismissal on the ground that “there has been no

waiver of sovereign immunity by the United States.” 236 F.3d at 1325. The Court of Appeals

for the Federal Circuit, observing that “[s]overeign immunity and subject matter jurisdiction are

related but different juridical concepts,” id. at 1326, further observed that “[u]nless the grant of

jurisdiction carries with it a coextensive waiver of sovereign immunity, the Congressional grant

would be a hollow act, with no significant consequences to the sovereign, and no significant

benefits to the sovereign’s subjects.” Id. at 1328. Analogizing to the Supreme Court’s analysis

of jurisdiction and waiver of sovereign immunity under the Tucker Act in United States v.

Mitchell, 463 U.S. 206 (1983), the Federal Circuit concluded in Humane Society that 28 U.S.C.

§ 1581 “not only states the jurisdictional grant to the Court of International Trade, but also

provides a waiver of sovereign immunity over the specified class of cases.” 236 F.3d at 1328.

The Court of Appeals further concluded in Humane Society that “[t]he Court of International

Trade properly exercised jurisdiction over this case.” Id.

With respect to the scope of the jurisdictional grant in 28 U.S.C. § 1581(i), the decision

of the Court of Appeals in Humane Society was consistent with a line of previous decisions in

which challenges to presidential action pursuant to tariff statutes were brought thereunder. In its

opinion in Humane Society, the Court of Appeals noted with approval the plaintiffs’ citation of

“numerous cases in which the Court of International Trade has since considered challenges to the

actions of the President pursuant to the grant of jurisdiction in § 1581(i). See, e.g., Florsheim

Shoe Co. v. United States, 744 F.2d 787 (Fed. Cir. 1984); United States Cane Sugar Refiners’
Court No. 03-00146 Page 15

Ass’n v. Block, 69 C.C.P.A. 172, 683 F.2d 399 (1982); Kemet Electronics Corp. v. Barshefsky,

976 F. Supp. 1012 (CIT 1997); Luggage & Leather Goods Mfrs. of America, Inc. v. United

States, 588 F. Supp. 1413 (CIT 1984).” 236 F.3d at 1327. This court cannot adopt the

interpretation of Corus Group advanced by defendants and, at the same time, adhere to the

jurisdictional principles set forth in Humane Society and the predecessor cases in which

presidential actions were challenged pursuant to 28 U.S.C. § 1581(i). Nor is this court able to

reconcile the construction of § 1581(i) advanced by defendants with the plain meaning of that

statutory provision.

As noted above, Corus Group did not overturn Humane Society. See Corus Group, 352

F.3d at 1359-1360. Furthermore, it did not overturn the previous cases identified in Humane

Society as “numerous cases in which the Court of International Trade has since considered

challenges to the actions of the President pursuant to the grant of jurisdiction in § 1581(i).”

Humane Society, 236 F.3d at 1327. Moreover, under precedent of the Court of Appeals for the

Federal Circuit, these earlier decisions may be overturned only en banc. See Sacco v. Dep’t of

Justice, 317 F.3d 1384, 1386 (Fed. Cir. 2003) (citing Newell Companies, Inc. v. Kenney Mfg.

Co., 864 F.2d 757, 765 (Fed. Cir. 1988) (“A panel of this court is bound by prior precedential

decisions unless and until overturned en banc.”)). To the extent of any conflict between the

decision in Corus Group and the decision in Humane Society, this court concludes that it should

follow the earlier decision, because a decision of one panel of the Court of Appeals for the

Federal Circuit should not be read to overturn the decision of a previous panel. “Where there is a

direct conflict, the precedential decision is the first.” Newell Companies, Inc., 864 F.2d at 765

(Fed. Cir. 1988).
Court No. 03-00146 Page 16

The second part of defendants’ argument on jurisdiction is that the recommendation of

the U.S. Trade Representative in the administrative proceeding was purely advisory, rather than

determinative of legal rights, and hence is unreviewable under principles announced by the

Supreme Court in Bennett v. Spear, 520 U.S. at 177-78, and cited by the Federal Circuit in Corus

Group. Having contended that this court lacks subject matter jurisdiction over an action brought

directly against the President and that the Trade Representative’s action cannot be challenged,

defendants present what is in effect an argument that this Court lacks subject matter jurisdiction

because there is no officer of the United States against whom relief may be sought. The court

finds this argument unpersuasive.

As confirmed by the jurisdictional analyses in Humane Society and in prior decisions

involving challenges to presidential action under trade statutes, 28 U.S.C. § 1581(i) provides

subject matter jurisdiction in this Court over a challenge such as this to final presidential action

taken under Section 421. Accordingly, the court need not reach the issue whether the Trade

Representative’s recommendation to the President, standing by itself, would have been

appealable in this forum as a final decision, or, alternatively, “purely advisory” under principles

advanced in Bennett v. Spear. See Bennett v. Spear, 520 U.S. at 178. The procedural actions

taken by the Office of the U.S. Trade Representative are challenged in this proceeding. They are

reviewable pursuant to the subject matter jurisdiction of this Court as procedural predicates to the

final presidential action. See Dalton v. Specter, 511 U.S. 462, 478 (1994) (Blackmun, J.,

concurring in part and concurring in the judgment); see also Fed. Trade Comm’n v. Standard Oil

of Calif., 449 U.S. 232, 244-245 (1980) (Preliminary decision to issue complaint by Federal

Trade Commission is not insulated by finality requirement, and “a court of appeals reviewing a
Court No. 03-00146 Page 17

[final] cease-and-desist order has the power to review alleged unlawfulness in the [preliminary]

issuance of the complaint.”).

Furthermore, were this court to accept the two premises of defendants’ jurisdictional

argument, subject matter jurisdiction would be found to exist in this Court where a challenge is

brought to a presidential decision granting import relief under Section 421 but not where the

challenge is brought against a presidential decision denying such relief. Where the action

challenged is one in which the President granted import relief, the Commissioner of Customs

could be enjoined from collecting duties or from excluding merchandise from entry. Where, as

here, the President denied such relief, defendants’ construction of § 1581(i) would leave no

officer of the United States who could be sued. Support for such an anomalous distinction can be

found neither in the language of 28 U.S.C. §1581(i) nor in the congressional purpose underlying

this jurisdictional provision. The jurisdictional bifurcation that would be created by defendants’

interpretation of §1581(i) would appear to blur the distinctions between subject matter

jurisdiction and personal jurisdiction. It also would lead to confusion of the type Congress

intended to prevent when it included 28 U.S.C. § 1581(i) as part of the Customs Courts Act of

1980, Pub. L. 96-417. As the Court of Appeals for the Federal Circuit observed in American

Association of Exporters and Importers–Textile and Apparel Group v. United States, 751 F.2d

1239, 1245-46 (Fed. Cir. 1985), that intent was “to establish clear rules and to center

international trade litigation in the CIT.”

For the foregoing reasons, this court rejects the interpretations of § 1581(i) and of Corus

Group that are advanced by defendants. Defendants’ motion to dismiss for lack of subject matter

jurisdiction is denied.
Court No. 03-00146 Page 18

B. Summary Judgment and Judgment on an Agency Record

In seeking dismissal of this action, defendants have moved for judgment on an agency

record pursuant to USCIT Rule 56.1, “Judgment Upon an Agency Record for an Action Other

Than That Described in 28 U.S.C. § 1581(c).” Subsection (a) of that Rule provides, in pertinent

part, that “where a party believes that the determination of the court is to be made solely upon the

basis of the record made before an agency, that party may move for judgment in its favor upon all

or any part of the agency determination.” In this action, however, the determination of the court

cannot be made solely on the basis of the record made before an agency, because the decision

under review is that of the President, not that of an administrative agency. For the same reason,

this case cannot be decided on the basis of judgment “upon all or any part of the agency

determination.” Therefore, the subject matter of Rule 56.1 does not precisely describe the issue

pending before the court.

This case presents no genuine issue as to any material fact. Both plaintiff and defendants

are seeking judgment as a matter of law. Specifically, plaintiff Motion Systems seeks an order

granting it judgment on the record setting aside the President’s determination not to grant relief

from imports. Defendants and defendant-intervenor CCL Industrial Motor Ltd. seek judgment as

a matter of law dismissing this action. These circumstances are within the ambit of Rule 56,

Summary Judgment.5 Accordingly, the court will consider defendants’ motion as a motion for

5
USCIT R. 56(c) states, in the relevant part:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.
Court No. 03-00146 Page 19

summary judgment under USCIT Rule 56 and, similarly, treat the submission of plaintiff

opposing defendants’ motion as a cross motion for summary judgment.6

C. Standard of Review for Presidential Actions under Trade Statutes

In reviewing final actions of the President, courts have applied a standard of review

considerably narrower and more deferential than the standards most often accorded to final

actions by administrative agencies, which Congress has subjected generally to standards of

review prescribed by the Administrative Procedure Act (“APA”), 5 U.S.C. § 706. The APA

provisions include the standard of review commonly referred to as the “arbitrary and capricious”

or “abuse of discretion” standard, under which a court will “hold unlawful and set aside agency

action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).

For cases brought under 28 U.S.C. § 1581(i), 28 U.S.C. § 2640 refers this court to the

APA, providing that the court “shall review the matter as provided in section 706 of title 5.”

However, 5 U.S.C. § 706 is expressly confined to the review of an “agency action.” As the

Supreme Court recognized in Franklin v. Massachusetts, 505 U.S. 788 (1992), “the President is

not an agency within the meaning of the Act,” concluding in that instance that “there is no final

6
At oral argument held October 22, 2003, the parties indicated that they do not oppose
the court’s consideration of the relief sought by defendants and plaintiff as a motion and cross
motion, respectively, for summary judgment under Rule 56. Oral Arg. Tr. at 64 - 66.
Subsequent to oral argument, plaintiff filed with the court a letter, dated November 18, 2003,
stating that plaintiff now considered summary judgment to be inappropriate and seeking to
“withdraw any concession that consideration under Rule 56 is in order.” In its opposition to
defendants’ motion under Rule 56.1, plaintiff had acknowledged that “[t]here are no material
issues of fact in issue in this action” and sought judgment on the record in its favor. Plaintiff has
not sought to amend its pleadings. Most significantly, plaintiff’s letter of November 18, 2003
does not establish that this case presents a genuine issue as to any material fact. Under these
circumstances, Rule 56 is the applicable rule under which this case is to be decided.
Court No. 03-00146 Page 20

agency action that may be reviewed under the APA standards.” Id. at 796. The Franklin Court

reasoned as follows:

The President is not explicitly excluded from the APA’s purview,
but he is not explicitly included, either. Out of respect for the
separation of powers and the unique constitutional position of the
President, we find that textual silence is not enough to subject the
President to the provisions of the APA. We would require an
express statement by Congress before assuming it intended the
President’s performance of his statutory duties to be reviewed for
abuse of discretion.

505 U.S. at 800-801. “Although the President’s actions may still be reviewed for

constitutionality, we hold that they are not reviewable for abuse of discretion under the

APA . . . .” Id. at 801 (citations omitted).

Franklin v. Massachusetts involved a judicial challenge to presidential action under the

statutory congressional reapportionment provisions. When reviewing presidential actions taken

under the authority of tariff statutes, courts also have limited the scope of their reviews, noting in

particular the relationship between actions taken under tariff statutes and the President’s unique

role in foreign affairs. In Maple Leaf Fish Co. v. United States, 762 F.2d 86 (Fed. Cir. 1985), the

Court of Appeals for the Federal Circuit stated as follows:

In international trade controversies of this highly discretionary
kind–involving the President and foreign affairs–this court and its
predecessors have often reiterated the very limited role of
reviewing courts. See, e.g., American Association of Exporters
and Importers v. United States, 751 F.2d 1239, 1248-49 (Fed. Cir.
1984); Florsheim Shoe Co. v. United States, 744 F.2d 787, 793
795-97 (Fed. Cir. 1984). For a court to interpose, there has to be a
clear misconstruction of the governing statute, a significant
procedural violation, or action outside delegated authority.
Court No. 03-00146 Page 21

762 F.2d at 89. Maple Leaf Fish Co. involved the review of presidential action under the “escape

clause” established by section 201 of the Trade Act of 1974, 19 U.S.C. §§ 2251-53. In

Florsheim Shoe Co., the Federal Circuit applied essentially the same standard of review in

considering a challenge to the President’s exercise of authority under the Generalized System of

Preferences (“GSP”) program (specifically, Section 504 of Title V of the Trade Act of 1974,

19 U.S.C. § 2464) to limit duty-free tariff treatment for a certain class of imported goods. The

Federal Circuit in Florsheim Shoe Co. concluded that “[b]oth the Supreme Court and Court of

Customs and Patent Appeals precedent have established that the Executive’s decisions in the

sphere of international trade are reviewable only to determine whether the President’s action falls

within his delegated authority, whether the statutory language has been properly construed, and

whether the President’s action conforms with the relevant procedural requirements.” Florsheim

Shoe Co. v. United States, 744 F.2d 787, 795 (1984). The court further concluded that “[t]he

President’s findings of fact and the motivations for his action are not subject to review.” Id.

(citing United States v. George S. Bush & Co., 310 U.S. 371, 379-80 (1940); United States Cane

Sugar Refiners’ Association v. Block, 683 F.2d at 404; Aimcee Wholesale Corp. v. United States,

468 F.2d 202, 206 (CCPA 1972)).

As do the trade enactments at issue in Maple Leaf Fish Co., supra, and Florsheim Shoe

Co., supra, Section 421 grants the President considerable discretion. The President may decide

to provide import relief to the domestic industry, or, after making certain findings, may decide

not to do so. If he decides to provide such relief, he may do so by means of “increased duties or

other import restrictions.” Section 421(a), 19 U.S.C. § 2451(a). The time period for the relief is
Court No. 03-00146 Page 22

also left to the President’s discretion; the relief is to remain in effect “for such period as the

President considers necessary to prevent or remedy the market disruption.” Id.

Section 421 does not indicate congressional intent to subject the President’s

determinations thereunder to an APA “abuse of discretion” or similar standard. Therefore, in

reviewing the President’s determination of January 17, 2003 not to proclaim restrictive measures

on imports of pedestal actuators from China, this court will uphold the President’s action absent

“a clear misconstruction of the governing statute, a significant procedural violation, or action

outside delegated authority.” Maple Leaf Fish Co., 762 F.2d at 89.

D. Analysis of the President’s Decision under the Applicable Standard of Review

1. Construction of the Governing Statute and Action Within Delegated Authority

This court finds no basis to conclude that the January 17, 2003 decision not to grant

import relief to the U.S. pedestal actuator industry is based on a misconstruction of Section 421.

The decision is consistent with the statute with respect to the types of factual determinations that

are required to support a denial of import relief to a domestic industry and with respect to the

requirement that the published decision include the “reasons therefor.” Moreover, because it

contains a specific determination and a specific finding responsive to the statutory criteria for

denying relief and presents reasons that are sufficient under the applicable standard for judicial

review, the President’s decision did not exceed the authority delegated by Congress in

Section 421.

The aforementioned statutory criteria are set forth in Section 421(k). Section 421(k)(1)

requires that a decision denying import relief be based on a presidential determination that

provision of relief is “not in the national economic interest of the United States, or, in
Court No. 03-00146 Page 23

extraordinary cases, that the taking of action pursuant to subsection (a) of this section would

cause serious harm to the national security of the United States.” 19 U.S.C. § 2451(k)(1). If the

President decides to deny relief under the “economic interest” criterion as opposed to the

“national security” criterion, the President may do so only upon a presidential finding under

Section 421(k)(2) that “the taking of such action would have an adverse impact on the United

States economy clearly greater than the benefits of such action.” 19 U.S.C. § 2451(k)(2).

The President’s January 17, 2003 decision contains a presidential determination under the

economic interest criterion: “After considering all relevant aspects of the investigation, I have

determined that providing import relief for the U.S. pedestal actuator industry is not in the

national economic interest of the United States.” The decision also contains a presidential

finding that “the import relief would have an adverse impact on the United States economy

clearly greater than the benefits of such action.” Finally, with respect to the President’s decision

to deny relief, the notice states “reasons therefor.”

This court’s consideration of the reasons stated in the presidential decision must be

informed by the degree of deference to be accorded to the President under the applicable standard

of review. As discussed previously, “[t]he President’s findings of fact and the motivations for

his action are not subject to review.” Florsheim Shoe Co. v. United States, 744 F.2d at 795.

Although the President must state reasons for his decision, those reasons are not to be reviewed

in this court under the “abuse of discretion” standard of 5 U.S.C. § 706(2)(A), nor are the

underlying findings of fact to be subjected to a standard such as the “substantial evidence”

standard described in 5 U.S.C. § 706(2)(E).
Court No. 03-00146 Page 24

The reasons set forth in the President’s notice refer to factual matters that were before the

President as a result of the investigation conducted by the USITC. They relate specifically to the

statutory “economic interest” criterion and the statutory requirement that denial of relief under

that criterion be based on a presidential finding that “the taking of such action would have an

adverse impact on the United States economy clearly greater than the benefits of such action.”

As a result, they are directed to the specific determination and finding which, under the plain

meaning of Section 421(k), must guide the exercise of presidential discretion to deny relief.

Having made both the “economic interest” determination required by subsection (k)(1) and the

finding under subsection (k)(2) that imposing import relief would have an adverse impact on the

United States economy clearly greater than the benefits of such action, and having presented

reasons for his decision in the published notice that are sufficient under the applicable standard

for judicial review, the President was acting within the boundaries of the discretion Congress

delegated to him in deciding not to impose import relief for the domestic pedestal actuator

industry.

Motion Systems contends that the President, in denying import relief following the

affirmative determination of market disruption by the USITC, both misconstrued Section 421 and

exceeded his authority thereunder. Once the USITC has made such a determination, plaintiff

argues, the President “is acting under a mandate to provide relief,” unless the President invokes

what plaintiff views “is meant to be a rare exception to that relief.” Pl.’s Br. in Supp. of its Opp.

to Defs.’ Mot. for Summ. J. upon an Agency R. (“Pl.’s Br.”) at 28. In plaintiff’s view, the statute

creates a presumption of relief in the use of the words “shall . . . proclaim” in subsection (a) of

Section 421, under which the President, following an affirmative USITC determination, “shall, in
Court No. 03-00146 Page 25

accordance with the provisions of this section, proclaim increased duties or other import

restrictions.” Pl.’s Br. at 24. Motion Systems finds further support for its interpretation in the

language of subsection (j)(2) of Section 421, which provides that the President, in the absence of

an agreement with the People’s Republic of China, “shall provide import relief in accordance

with subsection (a) of this section.” Id.

In asserting that the provision in subsection (k)(2) of Section 421 “is meant to be a rare

exception” to relief, Motion Systems places emphasis on the words “clearly greater” as used

therein (“The President may determine under paragraph (1) that providing import relief is not in

the national economic interest of the United States only if the President finds that the taking of

such action would have an adverse impact on the United States economy clearly greater than the

benefits of such action”). Based on the words “clearly greater” as used in subsection (k)(2),

plaintiff construes the statute to require that “[i]n order to support a denial of relief . . . the

evidence supporting the denial must be ‘clear,’ or beyond a reasonable doubt” and that “the

burden was on the President to make such a negative determination only where such more-than-

substantial evidence was produced.” Pl.’s Br. at 3. Plaintiff further contends that “[t]he record

must contain evidence quantifying the adverse economic impact on the United States economy of

providing such relief, not mere conjecture that there might be some adverse impact.” Id.

Regarding benefits of relief, plaintiff argues that “[t]he President has simply not examined or

quantified the benefits of relief, and thus the Court cannot sustain his determination that the

adverse impact on the United States economy of providing the recommended import relief would

be greater than those benefits.” Pl.’s Br. at 46.
Court No. 03-00146 Page 26

The court does not agree with plaintiff’s construction of Section 421. Subsection (k)(2)

describes the nature of the presidential finding that must precede a presidential determination that

providing import relief is not in the national economic interest. It does not impose on the

President a burden to establish or support that finding with “evidence quantifying the adverse

economic impact,” “evidence beyond a reasonable doubt,” “clear and convincing evidence,” or

“more-than-substantial evidence.” The provision itself makes no reference to evidence or burden

of proof. Nor does it indicate congressional intent to impose a standard of review different from

that which the courts consistently have applied in the judicial review of presidential action under

tariff statutes.

The use of the words “shall . . . proclaim” and “shall provide” in subsections (a) and (j)(2)

of Section 421, respectively, when read together with subsection (k)(2), do not impose on the

President the evidentiary requirements that plaintiff ascribes to these statutory provisions. The

words “shall . . . proclaim increased import duties or other restrictions,” as used in subsection (a),

are expressly qualified with the phrase “in accordance with the provisions of this section,” which

includes the exceptions provided for in subsections (k)(1) and (k)(2). Similarly, the “shall

provide” language of subsection (j)(2) incorporates the same exceptions through the use of the

phrase “in accordance with subsection (a) of this section.”

A judicial inquiry commensurate with plaintiff’s construction of the statute would require

this court to evaluate the sufficiency of the evidence underlying the President’s findings. That is

not within the court’s power. Again, “[t]he President’s findings of fact and the motivations for

his action are not subject to review.” Florsheim Shoe Co., 744 F.2d at 795.
Court No. 03-00146 Page 27

Plaintiff relies on a number of cases for its contention that the President’s findings should

be subjected upon judicial review to a “clear and convincing” evidentiary standard. The cited

cases include Finnigan Corp. v. Int’l Trade Comm’n., 180 F.3d 1354, 1366 n.8 (1999) (The

applicable standard for determining existence of invalidating activities in a patent case is “clear,

satisfactory and beyond a reasonable doubt,” which is “indistinguishable from the more modern

parlance of ‘clear and convincing’ evidence.”); United States v. United States Gypsum Co., 333

U.S. 364, 395 (1948) (Appellate review of a trial court’s findings of fact will be affirmed unless

“clearly erroneous.”); Connor v. United States, 24 CIT 195, 198 (2000) (To establish jurisdiction

under 28 U.S.C. § 1581(h) plaintiff must show by clear and convincing evidence that the

immediate threat of a harm occurring exists.). The cases cited by plaintiff are unavailing. None

establishes a rule of law under which this court, based on the effect of statutory words such as

“clearly greater” or any words to similar effect, is to subject presidential findings to a substantial

evidence test or a more stringent test requiring “clear and convincing” evidence or evidence

“beyond a reasonable doubt.”

In summary, the President’s decision of January 17, 2003 contains the determination and

the finding required by Section 421 to support a denial of import relief and presents “reasons

therefor” that are sufficient to support that decision under the applicable standard for judicial

review. The court finds no basis to conclude that the President’s decision is based on “a clear

misconstruction of the governing statute” or that it constituted “action outside delegated

authority.” Maple Leaf Fish Co., 762 F.2d at 89.
Court No. 03-00146 Page 28

2. Compliance with Procedures

The President’s decision not to impose import relief for the pedestal actuator industry is

subject to review by this court to determine “whether the President’s action conforms with the

relevant procedural requirements.” Florsheim Shoe Co.,744 F.2d at 795. As to review of

procedure, the Court of Appeals for the Federal Circuit stated in Maple Leaf Fish Co. that “[f]or

a court to interpose, there has to be . . . a significant procedural violation.” 762 F.2d at 89. The

court finds no such violation.

The Section 421 proceeding involved an affirmative finding by the USITC of market

disruption and a proposed remedy by the USITC, pursuant to Section 421(g). If the U.S. Trade

Representative proposes a measure to prevent or remedy the market disruption found by the

USITC to exist, the Trade Representative is required by Section 421(h) to publish notice of that

measure in the Federal Register and “of the opportunity, including a public hearing, if requested,

for importers, exporters, and other interested parties to submit their views and evidence on the

appropriateness of the proposed measure and whether it would be in the public interest.”

19 U.S.C. § 2451(h)(1). In this proceeding, the Trade Representative’s notice proposes the

remedy recommended by the USITC “for further consideration by domestic producers, importers,

exporters, and other interested parties, and invites any of these parties to submit their views and

evidence on the appropriateness of the proposed remedy and whether it would be in the public

interest.” USTR Notice, 67 Fed. Reg. at 71,008.7 At the request of Motion Systems, the U.S.

7
The notice also requested public comment “on other possible actions, including:
imposition of a quota on imports of pedestal actuators from China, with a quantity and/or
duration different from the USITC recommendation; imposition of a tariff-rate quota on imports
of pedestal actuators from China; increased duties on imports of pedestal actuators from China;
an import monitoring mechanism; or no import relief (pursuant to a determination under
Court No. 03-00146 Page 29

Trade Representative conducted a public hearing, which was held on December 18, 2002. Thus,

the Trade Representative’s procedures satisfied the basic procedural requirements of the statute

for public notice and comment and for a public hearing.

Motion Systems raises two objections to the Trade Representative’s conduct of the

hearing. First, Motion Systems asserts that the hearing procedures were not strict enough to

prevent Electric Mobility Corporation from placing on the record “views,” rather than “hard

evidence,” which views Motion Systems asserts would have been exposed as false if subjected to

“cross-examination.” Pl.’s Br. at 52-53. Plaintiff contends that the less-than-formal procedures

allowed Electric Mobility to place on the record statements indicating that Electric Mobility’s

switch to a Chinese supplier of actuators had reduced the price of that company’s scooters. In

testimony at the Trade Representative’s hearing, the president of Electric Mobility, Mr. Michael

Flowers, stated that when Electric Mobility switched its sourcing of pedestal actuators from

Motion Systems to the Chinese supplier it reduced the price of its Rascal Scooter by over $300.

A.R. Ex. IV at 7-8. Mr. Flowers followed that statement with the statement that he “believe[d]

the import quotas recommended will increase our average sale price by at least $200 next

year. . . .” Id. at 8.

Motion Systems, in a post-hearing submission, challenged the credibility of

Mr. Flowers’s testimony on several points. A.R. Ex. V, Comment 29. On the specific issue of

price, Motion Systems claimed that Electric Mobility had not reduced its scooter prices after the

change to the Chinese supplier. Id. Motions Systems placed two documents on the record to

Section 421(k) of the Trade Act regarding the national economic interest or national security).”
USTR Notice, 67 Fed. Reg. at 71,008.
Court No. 03-00146 Page 30

support its claim. The first document is a transcript of a hearing from a different federal court

proceeding in which another company official of Electric Mobility, Mr. George Flowers, stated

that the company had not sought out a cheaper supplier for the purpose of passing along savings

to consumers. Id. The second document is an article by an unidentified author that is described

as having appeared on the website www.geocities.com/stuportner/files/news.htm with the

headline “Electric Mobility To No Longer Sell Through Dealers.” The article states that “by

going direct, Electric Mobility can sell its popular Rascal scooter for $4,000 -$5,000, compared

to the roughly $2,900 dealers sell them for, sources say.” Id. Motion Systems, before this court,

claims that by allowing Mr. Flowers to place on the record “unsubstantiated” testimony, not

based on “hard evidence” and contradicted by documents on the record, the process allowed

incorrect statements on the record, without which the President’s findings cannot be affirmed.

Motion Systems reasons that Electric Mobility’s alleged failure to lower the price in the absence

of import quotas undermines the contention that imposing import quotas will result in increased

prices.

The second procedural violation plaintiff claims is that the advance “notice” Electric

Mobility gave of its intended presentation at the hearing was misleading. The Federal Register

notice of the hearing had requested that parties intending to appear provide “a brief summary of

the comments to be presented.” USTR Notice, 67 Fed. Reg. at 71,008. Electric Mobility filed a

letter stating that its president, Michael Flowers, would testify. It summarized Mr. Flowers’s

comments as follows:
Court No. 03-00146 Page 31

Mr. Flowers will testify that Electric Mobility is the only purchaser
of the actuators at issue, and that, no matter what remedy is
imposed, Electric Mobility will not resume purchases from Motion
Systems. He will also testify that the imposition of import
restrictions would harm the domestic economy and cause
additional burdens to the elderly and mobility-impaired.

A.R. Ex. III, Patton Boggs letter, Dec. 11, 2002. Motion Systems claims that Mr. Flowers’s

discussion at the hearing of the probability of increased prices for mobility scooters if the

proposed import relief were granted was outside the scope of the summary and, therefore,

improperly before the U.S. Trade Representative. See Pl.’s Br. at 54-55.

Plaintiff’s first procedural objection is not a sufficient basis upon which this court may

overturn or otherwise disturb the presidential decision. The Trade Representative’s procedures

afforded interested parties the opportunity to be heard in the precise manner required by

Section 421(h). Although Motion Systems may have desired a more trial-like hearing with

sworn testimony and cross-examination, nothing in the statute required such procedures.

So long as it satisfies the specific statutory requirements and adheres to “fundamentals of

fair play,” an agency has considerable latitude over its method of inquiry. FCC v. Pottsville

Broad. Co., 309 U.S. 134, 143-144 (1940). The Supreme Court has expressed this principle as

follows:

But this much is absolutely clear. Absent constitutional constraints
or extremely compelling circumstances the “administrative
agencies ‘should be free to fashion their own rules of procedure
and to pursue methods of inquiry capable of permitting them to
discharge their multitudinous duties.’”

Vermont Yankee Nuclear Power Corp. v. Natural Res. Def. Council, 435 U.S. 519, 543-544

(1978) (quoting FCC v. Schreiber, 381 U.S. 280, 290 (1965), in turn quoting from FCC v.
Court No. 03-00146 Page 32

Pottsville Broad. Co., 309 U.S. at 143). In this case, the Trade Representative’s procedures

allowed witnesses to make extensive statements at a public hearing and allowed participating

parties to submit supporting material. The President was free to consider the statements

submitted, weigh their credibility, and ignore irrelevant submissions. Motion Systems was

afforded the opportunity in a post-hearing submission to respond to the entire case made by the

importer, the Chinese manufacturer, and the Chinese government. Its objections to the placing of

the “views” of Electric Mobility on the record and to its lack of an opportunity to cross-examine

Electric Mobility’s witness do not establish, in the words of the opinion in Maple Leaf Fish Co.,

a “significant procedural violation.” 762 F.2d at 89.

Plaintiff’s second claimed procedural error, that the “notice” given by Electric Mobility

with regard to its presentation at the Trade Representative’s hearing was misleading, also fails to

suffice as a basis to invalidate the President’s decision. Electric Mobility’s pre-hearing summary

indicated that Mr. Flowers would discuss harm to the domestic economy and “additional

burdens” to consumers of the downstream products. Prices for the downstream products are

among the subjects relevant to the topic of “additional burdens” referred to in the pre-hearing

letter filed by Electric Mobility. In addition, Motion Systems had the opportunity to make a post-

hearing submission to the Trade Representative with the potential to cure the effect of any unfair

surprise Motion Systems may have encountered because of the content of Mr. Flowers’s

testimony. Motion Systems in fact made a post-hearing comment submission in which it

contested the validity of Mr. Flowers’s statements about the price of the downstream products.

A.R. Ex. V, Comment 29. That submission was part of the record available for the President’s

consideration.
Court No. 03-00146 Page 33

With respect to both of its objections to the Trade Representative’s hearing, plaintiff has

not established a procedural irregularity that denied it fundamental fairness, nor is it able to show

that it was harmed by the procedural errors it alleges. See Intercargo Ins. Co. v. United States,

83 F.3d 391, 394 (Fed. Cir. 1996) (“It is well settled that principles of harmless error apply to the

review of agency proceedings.”).

E. Other Challenges by Motion Systems to the President’s Decision

In addition to its challenge to the President’s construction of Section 421, its claim that

the President exceeded his authority thereunder, and its objections to the Trade Representative’s

hearing procedure, Motion Systems raises two challenges to the President’s decision and

decision-making process, which the court summarizes as follows: (1) the President and the

Trade Representative improperly considered “political factors” after the close of the statutory

U.S.-China consultation period; and (2) the President was required to reopen the proceeding after

the submission of additional evidence by Motion Systems in rebuttal to information submitted by

Electric Mobility.

1. The President Is Not Prohibited from Considering “Political Factors.”

Plaintiff alleges that the President and the U.S. Trade Representative acted improperly in

considering what it terms “political factors” after the conclusion of the period identified by

Section 421(j)(1) for consultations with China. In support of its claim, Motion Systems points to

a comment letter submitted to the Trade Representative by the Embassy of the People’s Republic

of China and testimony at the Trade Representative’s hearing by an official of the People’s

Republic of China, each of which, according to plaintiff, “argued that proceeding under this
Court No. 03-00146 Page 34

provision [i.e., Section 421] threatened ‘harm to China-U.S. trade and economic relations.’”

Pl.’s Br. at 50-51, 51 n.34.

Plaintiff submits that consideration of such “political factors” was improper after the

consultation period and that the President was then required to confine his consideration to

“economic factors.” Under Section 421(j)(1), “[t]he Trade Representative is authorized to enter

into agreements for the People’s Republic of China to take such action as necessary to prevent or

remedy market disruption, and should seek to conclude such agreements before the expiration of

the 60-day consultation period” provided for in the Protocol of Accession of the People’s

Republic of China to the World Trade Organization. If no agreement is reached, or if the

President “determines tha[t] an agreement reached . . . is not preventing or remedying the market

disruption,” then the President is directed to provide import relief in accordance with

subsection (a) of Section 421. 19 U.S.C. § 2451(j)(2). Motion Systems argues that, subsequent

to the consultation period, “[t]hreats of retaliation by China for application of the provisions of

the law whose enactment it agreed to as a condition of support for Chinese accession to the WTO

were improperly entertained and considered by USTR and the President.” Pl.’s Br. at 50-51.

The court finds no merit in plaintiff’s argument regarding “political factors.” Neither the

record before the court nor the text of the President’s decision establishes that trade relations

between the United States and China were a factor in the President’s decision. Regardless, the

court finds nothing in Section 421 that would have prohibited the President from considering a

wide range of factors, including an effect on trade relations between the United States and China,

in determining whether there would be an adverse impact on the U.S. economy clearly greater

than the benefits of granting relief. Nor does the court perceive any violation of Section 421 in
Court No. 03-00146 Page 35

the actions of the Trade Representative that included the Embassy letter in the record and that

allowed the testimony of the official of the People’s Republic of China. In enacting Section 421,

Congress gave no indication of an intent to interfere with the Executive Branch function of

communicating with foreign governments.

2. The President Was Not Required to Reopen the Proceedings.

Motion Systems argues that “[w]here, as here, the President’s decision is based on

testimony that is itself erroneous . . . there is an obligation to re-consider that decision in light of

the new information that has come to light,” adding that “[o]therwise, the integrity of a

section 421 proceeding, including in particular the President’s decision on remedy, is

compromised and justice is denied.” Pl.’s Br. at 60. In its post-decision submission, plaintiff

cited as the “new information” price lists from the Department of Veteran Affairs for Electric

Mobility’s scooters indicating that Electric Mobility did not decrease the prices of its

downstream mobility scooters after it switched to the Chinese pedestal actuator supplier and that

Electric Mobility did not make the “seat lift” standard equipment on 70 percent of its scooters.

Plaintiff contends that these price lists establish that the testimony by Electric Mobility’s

president at the hearing conducted by the office of the U.S. Trade Representative was incorrect or

misleading.

The matter raised in plaintiff’s post-decision submission does not suffice as a basis upon

which this court may compel the President or the Trade Representative to reopen the proceedings

for reconsideration of the President’s final decision. Plaintiff correctly observes that

administrative bodies have the authority to reconsider their decisions based on a showing of

perjury or fraud. See Pl.’s Br. at 58 (citing Alberta Gas Chemicals, Ltd. v. Celanese Corp., 650
Court No. 03-00146 Page 36

F.2d 9 (2d Cir. 1981)); see also Elkem Metals Co. v. United States, 26 CIT ___, ___, 193

F. Supp. 2d 1314, 1320 (2002). However, the decision to reconsider is one left to the agency in

question. A court will not disturb the decision of the agency not to reconsider, except upon a

showing of abuse of discretion. See United States v. Pierce Auto Freight Lines, Inc., 327 U.S.

515, 535 (1946). Even more deference likely would be due a decision not to reconsider a final

action taken by the President.

Plaintiff has not made a showing that the President or the Trade Representative

committed an abuse of discretion following issuance of the final presidential decision. In its

post-decision submission, Motion Systems addressed a general subject that the party already had

addressed in its post-hearing submission and that was not pivotal to the reasons underlying the

President’s decision as stated by the President in the Federal Register notice of January 22, 2003.

Accordingly, the “new information” offered in the post-decision submission does not establish

that the President’s final decision was, as plaintiff alleges, “based on testimony that is itself

erroneous.” (Emphasis added). Nor does it present facts that would compel the President, in the

exercise of his overall discretion as granted by Congress in Section 421, to reach a different

decision.

The Assistant Trade Representative’s letter following plaintiff’s post-decision submission

responded that the issue raised in that submission was neither novel nor determinative in the

proceedings. The letter stated that “[t]he issue of whether Electric Mobility reduced its price

after purchasing Chinese pedestal actuators was clearly reflected in [the materials submitted prior

to the decision] as disputed between the parties.” The letter concludes that the “issue relates only

indirectly to the considerations identified by the President as dispositive in his decision.”
Court No. 03-00146 Page 37

For these reasons, the matters raised in plaintiff’s post-decision submission are

insufficient to form the basis upon which this court may compel a reopening of the administrative

proceedings.

III. CONCLUSION

For the foregoing reasons, the court concludes that it has subject matter jurisdiction of

this case under 28 U.S.C. § 1581(i) and that the President’s decision denying import relief to the

pedestal actuator industry did not misconstrue the governing statute and did not exceed the

authority delegated to the President thereunder. The court finds no basis to overturn that decision

on procedural grounds or to order the President or the U.S. Trade Representative to reopen the

administrative proceedings. Summary judgment is granted for defendants and will be entered

accordingly.

Dated: June 3, 2004 /s/ Timothy C. Stanceu
New York, New York Timothy C. Stanceu
Judge